Forecast: Iraq graft will top $10 billion

Because their is no Congressional oversight, more than ten billion dollars will be lost to direct corruption in Iraq. This is not a facile prediction, nor an easy one. It is based on the first law of economics, "When the cost goes down, people buy more."

In this case, the cost of corruption is very, very low. A handful of contractors and a few military officers have been charged in some small-scale operations. Rumsfeld points the finger at the Iraqis, but the failure to prosecute American corporations, the construction and security contractors, will match the Iraqis and add a factor of two.

I am not talking about incompetence, which must be rampant for the infrastructure to still be down after all these years. I am talking about war profiteering on a scale never before seen in our history.

Democrats controlled Congress and the Presidency during the Second World War. Virtually the entire economy was dedicated to war materiel and support. But it was a Democrat in the Senate who led the investigation and exposed shoddy manufacturing, crooked contractors, procurement waste, and more. His committee went outside the lines of traditional politics. Its investigations were thorough, vigorous and completely out in the open.

Their findings embarrassed Congressmen and ruined dishonest businessmen. But he was not muffled by his party, nor by president Franklin Roosevelt. Instead FDR drafted him as his running mate. The head of that Senate committee was the junior senator from Missouri, Harry Truman.

We will never see integrity and energy like that with this president nor with this Republican Congress. Coverup, secrecy and disinformation are the hallmarks of the Bush administration, both here an abroad. Ten billion dollars is not a modest number -- ten thousand millions -- and I could easily have aimed lower. On the other hand, it's not the only pot of money in the running and we will be there a long time.

Instead of defending what is obviously a speculative number, and one you may have a better line on, I'd like to draw a further contrast between this reconstruction effort and the Truman era, namely the extremely successful reconstruction effort after World War II, the Marshall Plan.

George Marshall, the "great man" as Truman called him, twice Time's man of the year, once during the War and once afterward, constructed a European-based rehabilitation of Europe. He did not impose US companies and workers to rebuild Europe for them. Europeans identified the needs of their regions, organized the projects, ran the projects and depended on the US for technical assistance, material and machinery, and food.

The process organized and employed a devastated population and co-opted a strong anti-capitalist movement. (Much is made of the fact that Europeans, unlike Iraqis, have a history of democratic government and thus were more tuned to American efforts, but the Marshall Plan engaged the communists and the whole society in its own reconstruction. When you hear "Social Democrat," think in terms to their direct forebears, the communists.)

A Marshall Plan for Iraq would look nothing like the corporatist boondoggle we are now confronted with. At a minimum, such a plan would identify the credible political and industrial leadership in the domestic population, put them in charge, and provide the material and technical help to do what they identify as needing to be done. By empowering labor, technocrats and business types in this way, we at least provide a basis for stability, a stability which cannot be found in our current focus on political/religious leaders. The employment of the people in productive enterprises would be the biggest step possible toward peace and stability.

The problem of such a scheme lies not in the risk of further corruption, it lies in the probable partition of the country that would result, or at least a very loose federation of Sunni, Shiite and Kurdish states. The alternative to partition, unfortunately, is .... well, there is no alternative, is there? The outcome of the current mess is partition, whether before or after a subsequent civil war.

The outcome is not ours to control, and is not going to be what we might choose, but it would be far healthier, both in terms of the society's base and of that society's political independence from surrounding nations, if it came as result of our help to the people rather than in spite of our frustrated manipulation of them.

Of course, had we listened to George Marshall, we wouldn't be in this mess today. He adamantly opposed the establishment of a Jewish state in Palestine. Perhaps we should listen to him now, rather than continue to model corruption and hypocrisy for the world's people, even as we self-righteously declaim on the virtues of democracy.